Phennicie v. Phennicie

Can a Montana Divorce Settlement About the Family Home Be Changed Later? Phennicie v. Phennicie, 185 Mont. 120 (1979)

Boland Aarab PLLP

Sometimes. In Phennicie v. Phennicie, 185 Mont. 120, 604 P.2d 787 (1979), the Montana Supreme Court held that the terms of a divorce settlement letting the custodial parent live in the family home were part of the child-support provisions. Those terms could therefore be modified on a showing of substantially changed circumstances. The Court affirmed the modification in favor of Tom Boland‘s client, the mother, and sent back only the amount of her attorney-fee award for proper evidence.

Key Takeaways

• Settlement terms that function as child support, including the use of the family home while a child is still in school, can be modified even if the agreement says it is “forever binding” (Phennicie, 185 Mont. at 128–29).
• Modifying child support requires changed circumstances “so substantial and continuing as to make the terms unconscionable” (at 126; § 40-4-208(2)(b), MCA).
• Serving papers on a represented party instead of the party’s lawyer violates Rule 5(b), but it is not reversible without prejudice (at 124–25; Rule 61).
• An attorney-fee award must be supported by evidence of the fee’s reasonableness (at 127–28).

In this case sheet: At a glance · What the Court held · What changed · Laws · When it applies · How hard · Related law and later decisions · FAQ

The practice Tom Boland built is the practice that handles your case today. Contact Boland Aarab PLLP for a free consultation at (406) 315-3737.

At a glance

What did the Montana Supreme Court hold in Phennicie v. Phennicie?

Background. The parties divorced in 1974. Their property settlement agreement was incorporated into the decree but stated that it would “survive and be forever binding.” The divorce court reserved authority to change the provisions on custody and support of the children (185 Mont. at 122, 128). Under the agreement:

• the mother had custody of the three children;
• the father’s military retirement check funded an account used for child support, medical costs and the expenses of the family home;
• the mother would have the home until six months after the second child finished high school, when it would be sold (at 122–23).

Four years later, the father sought to enforce the sale. The mother asked the court to let her and the youngest child stay in the home, and the district court modified the decree in her favor (at 123).

The holding. The Supreme Court affirmed on each contested point:

1. Service on counsel. The mother’s petition was served on the father but not on his attorney until the day of the hearing. That violated Rule 5(b), M.R.Civ.P. But he had four days’ notice, he did not seek a continuance, he testified fully, and he identified no missing evidence. The error was harmless under Rule 61 (at 124–25).
2. The findings. Applying the substantial-credible-evidence standard, the Court upheld the findings on the accounting, the father’s improved finances, and the mother’s need for the home to raise the youngest child (at 125–27).
3. Changed circumstances. The district court made the required finding of changed circumstances “so substantial and continuing as to make the terms unconscionable” under § 40-4-208(2)(b), MCA (at 126–27).
4. The home was child support. A large part of the agreement’s child-support section dealt with paying for and maintaining the home. The home was “an integral part of the child support provisions,” so its terms “may be modified by further order” (at 128–29).
5. Attorney fees. Nothing in the record supported the $500 amount, so that one issue was remanded (at 127–28).

What did Phennicie change in Montana law?

Phennicie looked past the labels in a settlement agreement. A provision filed under “real property” can still be treated as child support when it actually serves that purpose, and if it does, it stays open to modification (at 128–29). The case also applied two procedural rules that matter in every civil case:

• a defect in service is not reversible without a showing of prejudice (at 125);
• a fee award must rest on competent evidence (at 127–28).

Later Montana Supreme Court decisions cite Phennicie on these points. Examples include Petritz v. Albertsons, Inc., 187 Mont. 102 (1980), and Marriage of Chapin, 202 Mont. 153 (1982), on evidentiary support for fees; Taylor, Thon, Thompson & Peterson v. Cannaday, 230 Mont. 151 (1988), on the substantial-evidence standard; and State v. Sheppard, 277 Mont. 76 (1996), on service.

Which Montana laws and rules apply?

• § 40-4-208, MCA: modifying maintenance, support and property provisions. The “substantial and continuing … unconscionable” standard remains in § 40-4-208(2)(b)(i). Later amendments added limits, including a general 12-month waiting period between modifications and use of the child-support guidelines. Subsection (3) separately restricts modification of property terms.
• § 40-4-201, MCA: separation agreements. A decree may limit modification except for terms concerning support, parenting or parental contact with children (now subsection (6)).
• § 40-4-204, MCA: child support (at 126)
• Rule 5, M.R.Civ.P.: service on a party’s attorney
• Rule 61, M.R.Civ.P.: harmless error. The rule has since been restyled (“Unless justice requires otherwise…”), but the principle is the same.

When might Phennicie apply to you?

• A settlement says the house will be sold on a set date. If living in the home was really part of supporting the children, a court may be able to revisit that term when circumstances change substantially.
• Your agreement says it is “forever binding.” Montana law does not allow parents to lock in child-support terms beyond the court’s power to modify them (§ 40-4-201(6), MCA).
• Papers were served on you instead of your lawyer. That is improper, but it will not undo a ruling unless it actually hurt your ability to present your case (at 124–25).

How hard is it to overturn a family-law ruling on appeal in Montana?

The standard of review is deferential:

• The Court “will not substitute our judgment for that of the trier of fact.” It asks only whether substantial credible evidence supports the findings, and views the evidence “in a light most favorable to the prevailing party” (185 Mont. at 125–26, quoting Cameron v. Cameron (1978)).
• Findings stand unless there is “a clear preponderance of evidence against them,” even when the evidence conflicts (at 125–27).

In Phennicie, that standard favored Tom Boland’s client, who had prevailed in the district court. The one issue remanded, the fee amount, turned on missing evidence rather than on the merits (at 127–28).

Related law and later decisions

Statutes and rules

• § 40-4-208, MCA: modification of support and property provisions. It has been amended since 1979; the “unconscionable” standard is now § 40-4-208(2)(b)(i), with added timing and guideline requirements.
• § 40-4-201, MCA: separation agreements. It has been amended; the support-and-parenting exception to non-modification clauses is now subsection (6).
• § 40-4-204, MCA: child support (amended many times since 1979)
• Rule 5, M.R.Civ.P.: service. The rule has since been restyled.
• Rule 61, M.R.Civ.P.: harmless error. The wording has been restyled but the principle is unchanged.

Later decisions citing this case

• Petritz v. Albertsons, Inc., 187 Mont. 102 (1980)
• Bier v. Sherrard, 191 Mont. 215 (1981)
• Jensen v. Jensen, 192 Mont. 547 (1981)
• Marriage of Chapin, 202 Mont. 153 (1982)
• SKI Roundtop, Inc. v. Hall, 202 Mont. 260 (1983)
• Ass’n of Unit Owners of Deer Lodge Condominium v. Big Sky of Montana, Inc., 224 Mont. 142 (1986)
• Taylor, Thon, Thompson & Peterson v. Cannaday, 230 Mont. 151 (1988)
• State v. Sheppard, 277 Mont. 76 (1996)

The Boland Aarab Way

Thomas E. Boland argued this appeal for Mrs. Phennicie. The Court affirmed on every contested issue except the amount of fees. Tom was admitted in 1974 and practiced in Great Falls from 1979. In 2017 his daughter, Caitlin Boland Aarab, and Samir F. Aarab founded Boland Aarab PLLP as the successor to his practice. The lesson of Phennicie, to build the record at the hearing, is one we still apply in our serious trucking and injury cases and catastrophic injury cases.

Frequently Asked Questions

Can child support terms in a Montana divorce agreement be changed? Yes. A court may modify child-support provisions on a showing of changed circumstances so substantial and continuing as to make the terms unconscionable (Phennicie, 185 Mont. at 126; § 40-4-208(2)(b), MCA).

Is the right to stay in the family home “property” or “support”? It depends on its function. In Phennicie, the home was “an integral part of the child support provisions,” so its terms could be modified (at 129).

Does improper service automatically reverse a Montana judgment? No. The Court held that failing to serve the other party’s attorney was harmless because the party had notice, testified fully and showed no prejudice (at 124–25).

Work With the Practice Behind These Cases

Boland Aarab is a Great Falls trial firm built on the practice Tom Boland began. The same attorneys who brief and argue before the Montana Supreme Court handle our clients’ serious injury, trucking and wrongful-death cases from the first call. Contact Boland Aarab PLLP for a free consultation at (406) 315-3737.

About Boland Aarab PLLP: Boland Aarab PLLP is a Great Falls, Montana trial firm. Its attorneys, Caitlin Boland Aarab and Samir F. Aarab, have appeared in more than 40 matters before the Montana Supreme Court and have argued twice before the U.S. Court of Appeals for the Ninth Circuit. The firm carries on the Great Falls practice Thomas E. Boland began in 1974. Meet our attorneys.

Sources:

• Phennicie v. Phennicie, 185 Mont. 120, 604 P.2d 787 (1979) (CourtListener PDF)
• Reported opinion with page numbers (Caselaw Access Project)
• § 40-4-208, MCA
• § 40-4-201, MCA
• § 40-4-204, MCA
• Rule 5, M.R.Civ.P.
• Rule 61, M.R.Civ.P.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship.